Daily
FX Update

US-China trade tensions dominate markets, dollar edges higher, stock and bond yields are lower

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China’s top trade negotiator Liu He plans to visit the US May 9-10 for a new round of high stakes talks in the face of President Trump’s tweets last Friday, threatening to hike tariffs on Chinese goods. The dollar edged higher across the board overnight. Chinese equities gained, but other Asian and European equities fell. US S&P futures indicate a lower open today. UST 10-yr yields dropped to 2.47%.

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  • FX Rates
    May 7, 2019

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The dollar is higher overnight, but less than 0.2% against most currencies. The only gainer versus the dollar was the AUD. There is little economic news today to affect markets. UST 10-yr yields moved lower to 2.47%. Commodity prices, including oil, dropped amid concerns that global trade will decline.

    GBP

    Amid various Brexit-related talks taking place this week, the UK pound has dropped back below $1.31. At the same time, currency option traders have become the most optimistic about the GBP in five months, as confidence grows that talks between the Labour Party and the ruling Conservatives will end in success.

    EUR

    The euro has dropped under $1.12 amid trade tensions and disappointing German industrial orders. Germany’s 10-year bond yields dropped into negative territory after March orders came in weaker than expected, and after the European Commission cut its economic growth forecasts for the Eurozone, citing escalating trade tensions as a significant threat.

    CAD

    Lower oil prices and US-China trade tensions dominate trading in the Canadian dollar, but it continues to trade well within its month-old 1.34-1.35 range.  

    ASIA/PACIFIC
    The Chinese yuan made minor gains overnight; however, offshore CNH remains weak, as speculators have been buying USD/CNH in anticipation of a move by China to weaken its currency in reaction to US tariff pressures.

    The Australian dollar jumped after the Reserve Bank of Australia was less dovish than traders had expected. The RBA left its policy unchanged at 1.5%. Many traders had been expecting a rate cut.

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Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/foreign-exchange

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About the Author

Scott Petruska is Chief Currency Strategist and senior advisor for Silicon Valley Bank’s global financial services group, and is based in Boston, MA. He advises clients on currency and interest rate hedging strategies, and helps them with other aspects of global banking. He regularly writes blogs on topics covering the global financial markets, conducts client seminars and webinars, and speaks at regional financial conferences.

Petruska has more than 30 years experience in the currency and interest rate markets, and has lived and worked in Boston, Chicago, New York City, Singapore and Tokyo. Prior to joining SVB in 2009, he worked at several large international financial institutions, including National Westminster Bank, Irving Trust, Bank of New York, State Street Bank and Commerce Bank. He has been an institutional trader, product developer, analyst, salesperson and advisor.

Petruska has been awarded several professional designations, including the CFA (Chartered Financial Analyst), FRM (Financial Risk Manager) and CMT (Certified Market Technician). He earned his undergraduate degree in Finance & Banking from the University of Wisconsin.

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